The recently discovered DPANN archaea are a potentially deep-branching, monophyletic radiation of organisms with small cells and genomes. However, the monophyly and early emergence of the various DPANN clades and their role in life's evolution are debated. Here, we reconstructed and analysed genomes of an uncharacterized archaeal phylum (Candidatus Undinarchaeota), revealing that its members have small genomes and, while potentially being able to conserve energy through fermentation, likely depend on partner organisms for the acquisition of certain metabolites. Our phylogenomic analyses robustly place Undinarchaeota as an independent lineage between two highly supported 'DPANN' clans. Further, our analyses suggest that DPANN have exchanged core genes with their hosts, adding to the difficulty of placing DPANN in the tree of life. This pattern can be sufficiently dominant to allow identifying known symbiont-host clades based on routes of gene transfer. Together, our work provides insights into the origins and evolution of DPANN and their hosts.